Why Blame Economy on GOP?

I often hear pundits and commentators, on the left and the right, say “this is a tough year for the GOP because the economy is so bad”. 

Why?  Why blame the GOP for the economy? 

Is it possible that we can take a few moments and think this through a little bit?

The economy isn’t all bad, just parts of it.  So, what are the bad parts?  Which parts are causing us problems?

1. Too much “Toxic Paper”.  The whole world invested trillions into exotic mortgage products that contained thousands of loans made to high-risk borrowers but implicitly guaranteed by the U.S. government.  This irrational exuberance lead to a housing bubble that, predictably, came crashing down, bringing the financial markets to their knees. 
2. Energy costs skyrocketed.  When oil prices shot up, the price of everything else shot up.   This increased the structural costs to everyone – reducing discretionary income, reducing sales, wiping out profits resulting in layoffs and making much harder for the average person and business to make ends meet.
3. Too much debt.  Even before the first two problems, U.S. households were carrying too much debt.  In the same way that having a nice chunk of savings helps you weather storms, having no savings and a lot of debt makes you vulnerable to storms.   

So, who caused these problems?  Yes, there are millions who don’t think things through very much and will blame everything on Bush.  There’s a lot of news media in this group.  Ironically, this same group will not give Bush credit for the good news in Iraq.  If you can make sense of that position, gold star for you.

Another group wants you to blame everything on Bush because they either want his job (Obama), or they want Obama to have his job, and, even though they know better, they will attempt to fool enough people to blame Bush, and McCain by association.  Barack Obama loves to say the current financial crisis is the “final verdict” on “eight years of failed Bush policies”.

Which Bush policies hurt the economy?

Tax Cuts?  NAFTA?  Too much spending?  Iraq?  Support for free markets?  Except for too much spending, which Democrats want more of, none of these “Bush policies” have anything to do with those things we already said damaged the economy (toxic paper, energy costs and too much debt).  On the contrary, Democrats are responsible for toxic paper and high energy costs.

So, using the Audacity of Reason, you can see that blaming Bush for the bad economy is weak, at best, and a bald-faced lie, at worse.  It’s much more credible to blame Democrats for two reasons:

1. Toxic Paper – Democrats encouraged the sub-prime loans (toxic paper) that are choking our financial markets.   Clinton took Carter’s CRA (Community Reinvestment Act) and turbo-charged it.  Sub-prime loans under Clinton increased five-fold from $200 billion per year to over $1 trillion per year.  That’s a lot of money.  Housing prices were artificially inflated when trillions were poured into Fannie and Freddie in search of high interest/government backed mortgage backed securities.   The Germans, Chinese and the Saudis never imagined that something called a “U.S. Mortgage obligation” was given to an unqualified borrower, sometimes without income verification.  Surprise!  Thank you ACORN!
2. High Energy Costs - Democrats keep energy prices high by clinging to their extreme environmentalism.   I like cleaner air and water but Democrats have taken that bit of common sense too far.  For example, modern offshore drilling is pretty safe now – at least the way U.S. companies do it.  Although OPEC has much more lax environmental laws, Democrats will attack them for not producing more oil instead of lifting the ban on clean U.S. drilling.  Obama led Democrats had a chance to lift the ban on offshore drilling or go on a 5wk paid vacation – they chose the vacation.  Ten years ago, Bill Clinton refused to drill in ANWR, preventing us from adapting to increased worldwide demand and Hurricane Katrina.  For thirty years Democrats have refused to allow a new nuclear plant or refinery to be built in this country.   It goes on and on and on…we have paid a steep price because of Democrats on this issue.

When the housing bubble burst, it was like watching a patient cough up blood – they looked fine but inside the patient was very sick because of the sub-prime loans Clinton injected into the U.S. economy back in the 1990s.   Bush applied chemotherapy treatment (the bailout) and we’re now waiting to see if the patient recovers.  That depends on how Bush administers the chemotherapy and whether the next doctor nurtures the patient with lower taxes (McCain) or kicks the patient in the teeth with higher taxes (Obama).

I pray tonight that America chooses McCain.